OCC Expands Banks’ Role in Crypto Custody and Services

OCC now allows banks to buy and sell crypto assets on behalf of their customers. U.S. banks can outsource crypto custody services, ensuring third-party compliance. OCC’s policy shift signals growing acceptance of cryptocurrency within the banking sector. The U.S. Office of the Comptroller of the Currency (OCC) has expanded the role of banks in cryptocurrency-related activities. In a clarification released on Wednesday, OCC stated that national banks and federal savings associations could now buy and sell cryptocurrencies held at their customers’ request in custody. The new guidance also includes the capacity of the banks to outsource crypto custody and execution services to third parties. Banks’ New Authority Over Crypto Assets This change is a considerable shift in regulatory policies. Under the newly issued interpretive letters of the OCC, banks qualify to participate in a broader range of cryptocurrency-related activities. Among them are buying and selling digital assets for the customers and outsourcing some crypto-related services. The OCC emphasized that these activities must be carried out safely following existing legal and regulatory frameworks. Acting Comptroller of the Currency Rodney Hood said that cryptocurrency has gone beyond being a trend. “It is a transformation,” Hood said, noting that the OCC is dedicated to integrating digital assets in the banking system. The new guidance follows several U.S. regulators’ reversal from their previous stance, which has become more open to cryptocurrency involvement by traditional financial institutions. Increased Role for Third-Party Providers In addition to having direct control of crypto-assets, the OCC’s revised policy also allows banks to partner with third-party service providers. These providers can provide crypto custody, record-keeping, and transaction settlement services. The OCC monitoring guarantees that third-party partnerships follow stringent risk management rules. The experts view this as a positive development for the crypto sector. Katherine Kirkpatrick Bos, General Counsel at Starkware, stated on social media that the policy change enables banks to incorporate digital assets more easily into their operations. “The additional clarity on third-party service providers is a boon to regulated crypto-native firms,” she remarked. Related: Conflict of Interest Allegations Against Trump Stall U.S. Crypto Legislation Talks This change by the OCC is part of a wider approach by U.S. financial regulators towards adopting cryptocurrency. This coincides with moves by the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) , which have relaxed restrictions on banks relating to crypto businesses. Similarly, in March, the Fed eliminated the need for state-chartered banks to seek permission to participate in cryptocurrency transactions. This step has paved the way for integrating crypto services in the conventional banking business. Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company. Source: https://coinedition.com/occ-expands-crypto-activities-for-banks-allowing-buy-and-sell-of-assets/